Abstract:Recent work on the subject speaks to the importance trust has for firm performance (e.g., Hagen and Choe, 1999; Hill, 1995). Yet little work has been done to show how context affects the ability of firms to create trust in relationships with key stakeholders. This paper looks at how the institutional environment may affect the performance of different strategies for managing firm-stakeholder relationships, and in turn, how this affects firm performance. The authors put forward propositions that build on these theoretical (...) insights and offer prospects for future empirical work. (shrink)

Over the last decade, and culminating in the 2008 global financial meltdown, there has been an erosion of trust and a concomitant rise of distrust in domestic companies, multinational enterprises, and political economies.In response to this attrition, this article presents three arguments. First, we suggest that trust is the “glue” of any viable political economy, and we propose that the stakes of violating public trust are particularly high in light of the asymmetry between trust and distrust. Second, we identify a (...) constellation of key barriers to overcoming distrust that companies face in the current environment: (1) corporate mind-sets that promote a preoccupation with quantification, hierarchical leadership models, and “blind trust” in authority; (2) the anonymity of core stakeholders; (3) the agency of the media as a driver of the political economy; and (4) firm-centric models of stakeholder relationships.Third, we argue that, notwithstanding these challenges, these phenomena are not fatal and can be addressed through a holistic transformation in corporate culture. Such a transformation might include a shift to collaborative leadership models and replacing authority models with responsibility, a “names and faces” approach to stakeholders through cases and stories, more egalitarian communication exchanges with external stakeholders, and a reprioritization of the firm as a vital element among others within a system rather than the central core of a network.We conclude that the value of trust at the individual, institutional, national, and global levels cannot be overstated. Without a reinvigoration of trust in our political economies, at all levels, the future of an economically vibrant planet is indeed bleak. (shrink)

An organizing framework is set out for the diverse literature on business ethics in relation to strategic management. It consists of sets of bi-polar components, spanning themes and topical themes, with a derived typology of contributions. Then, in the spirit of classical pragmatism, the organizing framework is re-cast as an integrative conceptual model of the strategy–ethics relationship. The approach recognizes that both pragmatism and dialectics can underpin progress towards integration, encompassing both normative and empirical aspects.

This article focuses on the issue of data mining as it relates to the consumer and to the issue of whether the consumer's private information has any proprietary status. A brief review of data mining is provided as a background for a better understanding of the purposes and uses of data mining. Also examined are several issues of the ethics of data mining, including a review of stakeholders, who they are and which may be most seriously affected by unethical data (...) mining practices. Several suggestions for the improvement of data mining as it relates to the consumer are further presented: suggestions that would allow for data mining that would be beneficial to both the business community and the consumer. (shrink)

This article focuses on the issue of data mining as it relates to the consumer and to the issue of whether the consumer's private information has any proprietary status. A brief review of data mining is provided as a background for a better understanding of the purposes and uses of data mining. Also examined are several issues of the ethics of data mining, including a review of stakeholders, who they are and which may be most seriously affected by unethical data (...) mining practices. Several suggestions for the improvement of data mining as it relates to the consumer are further presented: suggestions that would allow for data mining that would be beneficial to both the business community and the consumer. (shrink)

This article explores managers’ ethical reasoning for behaviors in price negotiations using evidence from 15 in-depth interviews conducted with sales and purchasing representatives in the chemical industry in Germany. Applying transaction cost economics, we find that negotiators in commoditized market-like exchanges either refer to deontological norms such as not to lie, or they neglect a role for ethics, arguing that distributive negotiation is per se opportunistic. In contrast, exchanges of products with higher asset specificity lead to stronger informational integration which (...) is supported with teleological justifications. Some negotiators use teleological justification to build business on trust rather than on economic safeguards as their firm norms would require. For negotiators, our results suggest considering institutional context and adjusting ethical reasoning to the negotiation situation. Firms need to recognize and find ways to address the potential conflicts of their internal norms with their frontline managers’ attempts to act in the firms’ best economic and ethical interests. (shrink)

I argue for the role of trust and cooperation as part of the foundation of digital commerce by expanding the reach of the Integrative Social Contract Theory of Donaldson and Dunfee. I propose that a digital business community can be a community in the morally relevant ways that Donaldson and Dunfee describe, and that the basic framework of ISCT can apply to the digital business world similarly to its application in the offline business world. I then analyze the roles of (...) trust and cooperation in e-commerce, showing how they are important to the digital business community and explaining their moral relevance under a digital form of ISCT. I use the ISCT framework to show that trust and cooperation are an instantiation of the hypernorm of necessary social efficiency, and that authentic microsocial norms developed for the ends of trust and cooperation carry moral responsibility. (shrink)

Trust is a key concept in business, particularly in electronic commerce. In order to understand online trust, one must first study trust research conducted in the offline world. The findings of such studies, dating from the 1950’s to the present, provide a foundation for online trust theory in e‐commerce. This paper provides an overview of the existing trust literature from the fields of philosophy, psychology, sociology, management, and marketing. Based on these bodies of work, online trust is briefly explored. The (...) range of topics for future research in online trust in e‐commerce is presented. (shrink)

Trust is critical to the development and maintenance of collaborative and cohesive relationships in societies, broadly, and in organizations, specifically. At the same time, trust is highly dependent on the social context in which it occurs. Unfortunately, existing research involving trust remains somewhat limited to a particular set of developed economies, providing a window to explore a culture's stage of economic development as a key contextual determinant of trust within organizations. In this article, we review the state of the scholarship (...) on trust and identify those qualities of trust that are common in organizations at similar stages of economic development, referred to as its etic aspects. We then also distinguish those elements of trust that are, to the contrary, culturally specific or emic in nature. We structure our discussion around the “life cycle of trust” (i.e., the creation, maintenance, and postfracture repair of trust) and consider unique factors in its application to developing economies. In doing so, we ground our examination in expository examples through field experience in Haiti. We conclude with the proposal of a framework for future research oriented toward the resolution of remaining theoretical and empirical queries as they relate to trust in developing economies. (shrink)

The issue of trust has increasingly attracted attention in the business ethics literature. Our aim is to contribute further to this literature by examining how the use of the carbon copy function in email communication influences felt trust. We develop the argument that the use of cc enhances transparency—representing an important characteristic of workplace ethics—and hence promotes trust. We further argue that a downside of the cc option may be that it can also be experienced as a control mechanism, which (...) may therefore negatively affect trust. The results of our first study showed that the use of cc indeed enhances perceived transparency, but at the same time also leads to the experience of increased control. Building upon this insight, the findings of five subsequent studies consistently revealed that the use of cc negatively influences felt trust. More precisely, employees felt trusted the least when the supervisor was always included in cc. This effect on felt trust also negatively influenced how trustworthy the organizational climate was perceived. We further replicated these results in two field surveys, which showed that the negative effect of cc on felt trust lowered perceptions of psychological safety and contributed to a culture of fear. Taken together, our findings suggest that when transparency in email communications is experienced as a control mechanism, its use is perceived as unethical, rather than as ethical. Implications and recommendations for future business ethics research are discussed. (shrink)

. Management scholars and practitioners often believe that individuals and organizations benefit by trusting their work contacts. (Husted, 1998; Sonnenberg, 1994) Trust is generally viewed as “good” and imperative to a modern functioning economy (Blau, 1964; Hosmer, 1995; Zucker, 1986) Consequently, scholars and practitioners have given scant attention to the “downside” of trust, despite the fact that trust involves taking risk under conditions of uncertainty (Rousseau et al., 1998) Recent corporate scandals show that people suffer when they misplace trust in (...) untrustworthy organizations and individuals. This paper develops a model of the causes and consequences of “over-trust,” which we define as a state where a trustor’s trust exceeds that which is warranted given the conditions. The antecedents of overtrust related to characteristics of the trustee, the trustor, and situational characteristics. We examine the role played by self-monitoring and perceived power base of the trustee as two key trustee characteristics. Among trustor characteristics, we examine the role (played by trustor’s core evaluation, core values). based on cultural affiliation), prior experiences with trustees, and use of habitual thinking behavior. Under characteristics of the situation, we examine the role played by uncertainty inherent in the situation, perceived threat from the context, degree of task interdependence, and organizational systems and routines. Next, we examine three consequences of over-trust – leniency in judging the trustee, delay in perceiving exploitation, and increased risk-taking. We conclude our paper by developing a set of guidelines that organizational members may employ to avoid over-trust. (shrink)

Across the management, social science, and business ethics literatures, and in much of the philosophy literature, trust is characterized as a disposition to act given epistemic states—beliefs and/or expectations about others and about the risks involved. This characterization of trust is best thought of as epistemological because epistemic states distinguish trust from other dispositions. The epistemological characterization of trust is the amoral one referred to in the title of this paper, and we argue that this characterization is conceptually inadequate. We (...) outline and defend an alternative conception of trust as a moral phenomenon: when A trusts B to do something, A invites B to acknowledge and accept an obligation; when B accepts the invitation, B takes on an obligation; in that way trust creates an obligation. We conclude with an application, drawing out the difference between the epistemological conception of trust and our own in the context of Ghoshal et al.'s (Sloan Management Review 40:9—20, 1995, Academy of Management Learning & Education 4:75—91, 2005) critique of transaction cost theories of the firm. (shrink)

Solidarity could be defined in the broad sense either as a means or as an end. Considered as an end, solidarity is the motive of any virtuous action based on altruistic reasons, such as helping others to rescue someone in order to prevent a harmful situation. E. g. contributing to lift and rescue a heavy person, lying unconscious in the street on the floor, who is being handled by rescuers, but who might be needing an additional person, could express the (...) value of solidarity as an end, since an answer to others request for help is given in the situation of emergency and risk, without having a particular obligation to help. Solidarity as a means (to an end, not an end), could be understood as a property of dependency of a set of parts to a whole (in solidum), as when in a family or a professional group, individual and collective roles and responsibilities are melt together to some extent.This idea of benefiting others could be understood either as a way of sharing together moral sentiments as love, social virtues as friendship and shared commitments and common economic and educational interests, in a limited community circle, that of the family. Even if the division of labour is not simply based on patriarchal authority, mutual consent of family members to rules and to a common circle of interests, those of the family, resemble to a egoism of the group, and not yet to truly social and altruistic values. Solidarity as cohesion of human beings, by the means of "interchangeability of ideas, services, goods, of workforce, virtues and vices", is solidarity limited to the constitution of a process of exchange that is a means that could be used to different ends. (shrink)